Consumer Tips from BBB: Ensuring Confidence in Home Contracting during National Homeownership Month

In celebration of National Homeownership Month in June, individuals in the United States have an opportunity to reflect on the significance of their homes and their role in their lives. Given the average asking price of $319,000 for a home, becoming a homeowner requires dedication, patience, and smart budgeting. While closing the deal on a first-time home purchase is often a cause for celebration and gratitude, it doesn't take long before homeowners encounter their initial major home improvement project.

Steer clear of fraudulent home improvement schemes

Purchasing a home is a major and crucial investment for consumers. Therefore, it's vital to exercise caution when hiring contractors for home improvement projects in order to protect this investment. According to BBB Scam Tracker, consumers in the U.S. reported losing over $1.1 million to home improvement scams in 2021, with a median loss of $944 per report. Scammers frequently pose as reputable or established companies and vanish after receiving an initial payment, leaving homeowners in distress. When homeowners attempt to reach out to the corporate or local offices of these companies for communication, they discover that the person who sold them the job is not an employee.

Home improvement scams often start with unsolicited offers from door-to-door salespeople or advertisements on social media. While not all door-to-door solicitors are scammers, BBB advises exercising caution and thoroughly evaluating any contractor who employs this method, especially after destructive storms or natural disasters. Some businesses may lack sufficient insurance coverage for accidental damages to your home or yard during the project, use substandard materials that won't last, or lack the necessary licenses to perform repairs or renovations in your area. Be especially cautious of contractors claiming to have been working in the area and offering discounted completion of your project using leftover materials.

Helpful tips for homeowners to confidently contract services

Obtain at least three quotes. BBB strongly advises homeowners seeking services for any type of work to obtain at least three quotes from different businesses before making a final decision. Comparing multiple quotes provides homeowners with a clear understanding of pricing and services, enabling informed discussions with their chosen contractor regarding the project's cost. Homeowners who take the time to interview several companies before contracting can be confident they are not overpaying for services.

Avoid paying the full project cost upfront. Even if a contractor offers a substantial discount for paying the entire project cost upfront, BBB always recommends making staggered payments throughout the project's duration. This allows homeowners to inspect the work at specific milestones, ensuring their satisfaction before releasing the next payment installment. Homeowners should be wary of contractors using aggressive tactics or demanding full payment before commencing the project. Generally, deposits should range between 10-30% of the total project cost. While some contractors may require a larger down payment due to material costs or other factors communicated in advance, homeowners should be cautious of contractors asking for more than half of the total project cost upfront.

Familiarize yourself with licensing requirements. Depending on the type of work desired, state or local regulatory agencies may have different licensing requirements. For industries that typically demand licenses (such as electricians, HVAC technicians, plumbers, pesticide applicators, etc.), homeowners should take the time to verify the validity of the license with the relevant agency. Contractors should readily provide information on how homeowners can verify their active license. Remember, homeowners may be held liable for work completed by an unlicensed contractor that fails to comply with building codes or results in property damage.

Exercise caution with "too good to be true" deals. As with any marketplace transaction, it is important to critically evaluate deals that appear excessively advantageous. Trust your instincts and have a basic understanding of the standard costs of the project by obtaining multiple quotes. Scammers and con artists often employ the tactic of offering goods and services at steep discounts for a "limited time" to prompt consumers into making hasty decisions without verifying the legitimacy of the business or individual.

For further information, BBB provides an online resource center, BBB.org/HomeHQ, to help homeowners understand various aspects of homeownership, home improvement, and repair projects. In addition to contracting advice for plumbers, electricians, roofers, and landscapers, the resource center also offers information about mortgage lenders, home inspectors, and real estate agents. Homeowners can utilize BBB's search engine to find contracting services near them, both BBB Accredited and non-accredited, to aid in their decision-making process.

First Appeared on Aiken Standard

Consumer Tips from BBB: Ensuring Confidence in Home Contracting during National Homeownership Month